Global Systems and Governance content

Globalisation

The increasing integration of economies, societies, and cultures through trade, communication, and migration.

TNCs

Companies operating in multiple countries.

BRIC

Brazil, Russia, India and China.

MINT

Mexico, Indonesia, Nigeria and Turkey.

FDI

Investment by businesses/governments into foreign economies.

Remittance Payments

Money sent home by migrants.

Labour Movement issues

Immigration laws and border patrols.

Capital Movement

Money moves freely.

Labour Migration Driver

Economic opportunities.

Protectionism

Trade barriers used by governments to protect domestic industries.

Containerisation

Standardised shipping containers.

Regional Trading Blocs

Groups that reduce trade barriers and promote economic cooperation.

High-Level Services

Finance/IT in developed economies.

Low-Level Services

Customer service/tourism are often outsourced.

Digitisation & Satellites

Enable instant global communication.

Global Marketing

Selling products worldwide with unified branding.

Manufacturing Shift

From developed countries to low-wage economies.

Factory Location Influences

Labour costs, infrastructure, tax incentives, and market access.

Deindustrialisation

Decline of manufacturing in developed countries, leading to job losses.

Consumption Patterns

Traditionally highest in the US & Europe, shifting towards Asia.

Dyson Case Study

Moved production to Malaysia, later headquartered in Singapore, following market and cost advantages.

China's Market Expansion

Belt and Road Initiative increases trade routes and economic influence.

Financial Services in Asia

Growth in banking and investment sectors challenges Western dominance.

Factors Driving Globalisation

Trade, TNCs, technology, migration, finance, and deregulation.

Communication Technology

Internet, mobile networks, and satellite links.

Mobile Phones in LDEs

Provide banking, market information, and business opportunities.

Computerised Logistics

Systems that streamline global supply chains and inventory management.

Global Financial System (GFS)

Regulates capital flows, with oversight by the IMF and World Bank.

Financial Integration (1970s-80s)

Driven by deregulation, allowing freer movement of capital.

Disadvantage of Integration

Increased financial volatility, leading to crisis like 2008/9.

Key Transport Developments

Larger aircraft, low-cost airlines, containerisation, rail networks, and logistics hubs.

Dry Ports

Inland terminals that speed up trade by handling customs and transport logistics.

Security Threats

Terrorism, cyber threats, smuggling, and financial crime.

International Security Collaboration

Counter-terrorism efforts, intelligence sharing, and border controls.

World Customs Organisation

Ensures trade security and standardised customs procedures.

Economies of Scale

Large-scale production lowers costs, increases efficiency, and expands markets.

Global Value Chains

Networks of production stages across countries for efficiency.

Just-in-Time (JIT) Production

Minimises stock, reducing costs and improving responsiveness.

Trade Agreements & Blocs

Promote trade by reducing tariffs and regulations.

USMCA

United States-Mexico-Canada Agreement that replaced NAFTA.

Major ASEAN Members

Indonesia, Thailand

Major EU Members

Germany, France

Major OPEC Members

Saudi Arabia, Venezuela

G7

World's 7 largest economies

G20

20 major economies, including China.

OECD

Organisation for Economic Co-operation and Development.

WTO

Regulates trade and resolves disputes.

World Bank

Funds development projects in poorer nations.

Bilateral Agreements

Involve two parties

Multilateral Agreements

Includes multiple countries, often under WTO rules.

Unequal Flows of People

Major flows are from LDEs to HDEs.

FDI & TNC Growth

TNCs invest in LDEs, creating jobs but keeping profits abroad, reinforcing inequality.

Foreign Aid & Inequality

Can create dependency and benefit donor countries more than recipients.

Outsourcing

Benefits businesses with lower costs but can lead to job losses in HDEs.

Privatisation & Inequality

Selling state-owned assets to private firms can widen wealth gaps.

Deregulation

Reduces government control, increasing market efficiency but also risk.

Multiculturalism

Integration of diverse cultures.

Information & Data Flows

Digital divide between developed and developing nations limits access to technology.

Globalisation & Inequality Reduction

Expands trade and investment but benefits are unevenly distributed.

Gini Index

Measures income inequality within countries; higher values indicate greater disparity.

Wealthier Nations & Power

Control major institutions like the IMF and WTO, shaping global rules to their advantage.

China's Investment in Africa

Provides infrastructure but results in debt dependency.

Belt & Road Initiative

China's global infrastructure project increasing its geopolitical influence.

Comparative Advantage

Countries specialise in goods they produce most efficiently, boosting global trade.

Protectionism Examples

Trade barriers like tariffs, quotas, and subsidies protect domestic industries.

Free Market vs. Regulated Economy

Free markets have minimal government control, while regulated economies impose restrictions.

Free Trade

Removes tariffs and barriers, increasing global trade but sometimes harming domestic industries.

Globalisation & Trade Trends

Increases trade flows, creates interdependence, but also economic vulnerabilities.

Why Attract FDI?

Boosts economic growth, infrastructure, and employment.

FDI Trends

Shift towards Asia, decline in developed economies.

Top FDI Recipients

USA, China, and EU.

USA & Trade Agreements

Traditionally protectionist, but engages in bilateral deals.

EU Customs Union Benefits

Free trade within the bloc, common external tariffs.

Concerns Over Mercosur Deal

Farmers worry about competition; environmentalists oppose deforestation links.

China's Global Trade Influence

Export-driven growth, major trading partner for many regions.

China vs. India Economies

China is export-led, India has a service-driven economy.

Mercosur

South American trade bloc which faces political and economic challenges.

Pacific Alliance

More open to global trade, while Mercosur is more protectionist.

Challenges to Investment in Sub-Saharan Africa

Poor infrastructure, political instability, and weak institutions.

AfCFTA (African Continental Free Trade Area)

Aims to boost intra-African trade and economic integration.

Fair Trade

Ensures better wages and working conditions for producers in developing countries.

SDT (Special & Differential Treatment)

WTO policies giving developing nations preferential trade terms.

Why TNCs Expand Globally

Avoid tariffs, lower costs, access new markets, exploit resources.

R&D Locations

Near universities in developed nations to access skilled labour and research facilities.

Manufacturing Locations

In LDEs for lower wages, tax incentives, and access to raw materials.

Offshoring

Moves company-owned production abroad.

Outsourcing

Hires External foreign firms.

Offshoring & Outsourcing Risks

Job losses in HDEs, poor working conditions in LDEs, supply chain vulnerabilities.

Primary Sector TNCs

Operate in resource-rich countries.

Secondary Sector TNCs

Manufacture in emerging economies.

Service Sector TNCs

Call centres in India; financial hubs in London and New York.

Vertical Integration

Controlling all supply chain stages.

Horizontal Integration

Expanding at the same production stage via mergers or acquisitions.

Positives of TNCs in Host Countries

Jobs, infrastructure, tech transfer.

Negatives of TNCs in Host Countries

Exploitation, pollution, profit leakage.

Positives of TNCs in Origin Countries

High-value jobs, tax revenue.

Negatives of TNCs in Origin Countries

Job losses, deindustrialisation.

Winners

Consumers, skilled workers, TNCs.

Losers

Low-skilled workers, small businesses, the environment.

Benefits of Globalisation

Economic growth, cultural exchange, tech progress.